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This story was first published on March 1, 2009. It was updated on June 19, 2009.

We take you to a place where kidnappings, torture, and even brutal beheadings have become common. We're talking about Mexico.

Two years ago, Mexico's President Felipe Calderon declared war on the country's powerful drug cartels - the main suppliers of cocaine, marijuana, and methamphetamine to the United States. In response to the government's assault, the drug cartels have been fighting back hard.

It's gotten so bad, a U.S. military report warned that Mexico could face "rapid and sudden collapse." How worried is the U.S. government about the war next door? 60 Minutes and CNN's Anderson Cooper interviewed the secretary of the Department of Homeland Security, Janet Napolitano, for this report, which first aired this past March.

"The stakes are high for the safety of many, many citizens of Mexico and the stakes are high for the United States no doubt," Secretary Napolitano told Cooper.

The stakes are high, not just because Mexico is a key American ally and trading partner, but because the drug cartels are fighting to control areas right along the U.S. border, just miles from cities like San Diego and El Paso.

Asked if the violence in Mexico is a threat to U.S. national security, Napolitano told Cooper, "It is certainly something that is of major concern. It's our neighbor to the south. It's a major partner in many areas. So it's something, for example, that I, as secretary of Homeland Security, pay a lot of attention to."

There's a lot to pay attention to in Mexico: 60,000 Mexican military and police are fighting against the five major drug cartels which control lucrative smuggling routes into the U.S.

They've managed to arrest some top traffickers, but new and more ruthless leaders have filled the vacuum, battling both the government and each other. They're terrorizing the country with very public acts of violence.

In December, a group of Mexican soldiers was found with their heads cut off, and a note from traffickers warning "for every one of mine you kill, we will kill 10."

A decapitated man was left hanging from a bridge; his head was found in the town square. Last year alone, nearly 6,300 people were killed in Mexico's drug war - more than double the number the year before.

Cartels are also increasingly expanding into human smuggling, extortion and kidnapping. Smaller criminal gangs have also gotten into the game, turning Mexico into one of the kidnapping capitals of the world.

"We are afraid of getting in a car, getting in a taxi, walking in the street alone. Going by the hand with your child," Claudia Wallace told Cooper.

Wallace's 35 year old brother Hugo was kidnapped while on a date in Mexico City. A month after he disappeared, his mother, Maria Isabel got a ransom note with a picture of him wearing a blindfold.

Months later, police told her Hugo had been killed by his kidnappers. And they told her what happened next.

"They took my brother to the bathroom, went to Wal-Mart, bought a saw, an electric saw, and returned to the apartment and cut my brother. And put it in a black bag," Wallace said.

They've never been able to find Hugo's remains.

Kidnappers don't just target the rich - the poor are victimized as well. A 5-year-old boy whose parents had a stall in a market was kidnapped in October. When the kidnappers thought the police were on to them, they killed the boy by injecting him with acid.

Last summer, 150,000 people marched to voice their frustration over the rising violence. Hugo's mother, Maria Isabel, has become a vocal advocate for victims. But in Mexico today, that can get you killed.

Gunmen riddled her car with bullets last year. "I think that we're at a point in which if the government doesn't put all of its effort into this, the drug traffickers, the kidnappers, and organized crime will ultimately take control of the country," she told Cooper.

In some towns, they have already taken control. Back in February in the city of Juarez, cartels threatened to kill a police officer every 48 hours until the police chief resigned. After two murders he did. Juarez's mayor moved his own family to Texas.